Christopher Brace is a classically trained strategic consultant with shopper planning, brand management, traditional advertising, and promotions experience. As the CEO of Shopper Intelligence, he draws from this diverse background to help companies discover better insights, strengthen their shopper planning capabilities, and integrate consumer, shopper, and trade planning through insight and strategy. He is on the forefront of reshaping how brands build their go-to-market strategies so they deliver sustainable organic growth.
In this interview with FRESH on 8th April, 2014, Chris talks about how retail marketers can benefit greatly from understanding the emotional side of shoppers, because this is what triggers most of their purchasing decisions. Too much stress on quantitative analysis could lead to only half-informed decision making.
Q1. Chris Brace, according to you, what is the state of the retail industry today?
Retailers today talk about customer centricity but they’re executing it through a very product-centric approach. They’ve chosen to focus on the rational side of customers, almost to the exclusion of the emotional side. Retailers believe that analyzing shopper data as the sole way to develop appropriate promotional programs is the key to increasing category sales. However, they should understand that a purchase decision is triggered by emotion because the human brain itself is triggered by emotion. For humans, emotion and reason are interconnected and interdependent and we require both to make sound decisions.
Retail marketers significantly underplay the role emotions play in driving purchasing decisions. They believe they can increase customer acquisition by providing the best promotional price combined with the best combination of product attributes. However, this is not a sustainable competitive advantage. If you want to own shoppers’ wallets, you must first own their hearts and their minds. Right now, the industry is focusing on the wallet and ignoring the heart.
If a retailer’s main objective is to maximize his top and bottom line growth by influencing shoppers’ purchase decisions, then it is imperative for him to understand the shoppers’ decision-making process. For example, 95 percent of a shopper’s decision-making process happens in their subconscious mind leaving only five per cent to their conscious brain. Yet marketers mostly address the five percent because it is easily quantifiable and predictable. Everything we do as humans is driven by emotions. Studies have shown over and over that whenever we are faced with a choice, it is our emotional wiring that is activated first, then our rational. Be it buying a wedding ring or a stick of gum, a person’s emotional wiring is activated first.
I often get asked if the 95 percent/5 percent split is relevant to the in-store environment. What we must recognize is that a shopper’s decision is a process, one that can start out-of-store and conclude in-store. Overall, out-of-store and in-store, the 95 percent/5 percent applies. What percent happens out-of-store versus in-store is harder to predict. But in any case, our shopper communications must always be a combination of emotional triggers and product attributes. Bringing emotion to communications through consumer and shopper insights is one of the biggest opportunities in retail marketing today.
Q2. What methods are employed by retailers to gain shopper insights?
Today, retailers are relying on quantitative data and analytical methods to understand shopping behavior and derive insights. They believe the key to their success lies in shopper data. However, placing too much reliance on historic data, whereby expecting past behaviors to predict future purchase decisions, could be a big mistake.
While past shopping data tells us about the ‘what’ aspects of shoppers’ purchasing patterns, it does not provide any guidance behind the ‘why’ of the purchase decisions. This is the missing link to solving the big shopping puzzle. Information like the frequency of visits to the store, the time and money spent on each category of products and the ticket size of the purchase may tell you ‘what’ you need to do, but it doesn’t tell you ‘why’ the shopper will care. ‘What’ strategies might work in the short-term, but a more sustainable route lies in understanding the ‘why’ of shopper behavior.
Q3. You spoke about consumer and shopper insights. Is there any material difference between the two?
Yes there are distinct differences between the two. The shopper insight addresses the behaviors by answering the questions ‘what are they doing’ and ‘what do they need.’ The consumer insight identifies the emotional triggers of those behaviors by answering ‘why are they doing it’ and ‘why do they need it.’ Retailers can analyze their shopper data and observe shoppers in-store to understand the ‘what’ but without the ‘why’, their analysis is far less actionable. It’s very difficult to change a shopper’s behavior if you don’t know the emotional motivations of that behavior, unless of course you throw money at them, which is what happens all the time.
Think about laundry detergent. Can a consumer have a deep emotional belief that leads to how they view/perceive/use laundry detergent? Absolutely. A consumer’s life is whole and layered. It does not exist in a vacuum and therefore there’s room for laundry detergent to fit within their beliefs and attitudes about the life they live. Say their belief is that the world is to be experienced, not watched. Their attitude, which stems from this belief, is that kids learn by experiencing the world and getting dirty. This then drives the behavior of buying ImaginEarth laundry detergent, “it gets out the dirt but leaves in the learning.” They link their worldview to their purchase decision. How would this belief and attitude translate to an insight?
“I want my kids dirty. I know that may sound crazy but if they’re dirty then I know they’ve been digging, playing, experiencing. That’s how they learn, by getting out in the world and dirtying things up.” Imagine the communications this insight could lead to. It would certainly be more than what every laundry detergent tells us today, “Hey did you know we get your clothes clean?”
In looking for insights, we need to understand our consumer and shopper cohesively, either as two people coming together to make one purchase decision or as one single person representing both roles. We need both a shopper and a consumer insight to create communications that connect, engage and inspire. The key learning here is that what drives a shopper’s behavior in-store comes from their life as a consumer outside the store.
Q4. Why do you think it is important for a retailer to understand the customer’s psyche?
Let’s look at a shopper’s reality. The typical grocery store contains 40,000 SKUs (Stock-Keeping Units) supported by 9,378 pieces of marketing materials. If a shopper were to contemplate each SKU and communication, he would be in the store for 68 hours. According to POPAI’s 2012 Shopper Engagement Study, only 17 percent of shoppers ‘note’ (glance at) a display in their line of site. This means much of a retailer’s display space is going completely unnoticed. Why? Well, mainly because we’re not designing displays so they get noticed. The only hope we have of our communications being noticed is if
1) your brand or category is relevant to the shopping task, and/or
2) your message has deep emotional resonance.
If your brand or category is on the shopping list then chances are this will qualify as a base volume purchase. But if you are not on the list then you need emotional resonance to drive that incremental purchase. This is where the real growth exists. We need to identify those deeply emotional triggers and then translate them into effective in-store communications so our displays are driving more incremental purchases. This is why it’s important for retailers and brands to understand the psyche of the customer.
Q5. You have made a very interesting point – retailers and shopper marketers should focus more on qualitative, emotional insight rather than number crunching historical data. Could you elaborate a little more on this?
As marketers, we believe that complex problems are best solved with statistical evidence. Customer Relationship Management Systems claim the ability to predict future behavior based on past purchase behavior while surveys enable us to quantify possible reasons and rational. What we’re missing is a deeper understanding of how shoppers think, feel, behave, and interact. We aren’t connecting with shoppers in a meaningful way because we are missing the full truth about why they make their choices, leading us to, at times, make the wrong strategic choices.
If we’re going to address shoppers’ subconscious minds – the real driver of behavior – then we need to become much more adept at using emotion-based information, (specifically insights) as the basis for our strategies. We need to start here, understanding the emotional connections through qualitative insights, before we go straight to big data. Shoppers’ beliefs and attitudes best predict their future behavior and connecting emotionally with them at this level is what leads to long-term, sustainable loyalty.
Retailers’ campaigns help persuade shoppers, yet we actually know very little about how shoppers are persuaded. They should, like brands, rely more on qualitative research to build better customer profiles and segmentation and understand their behavior – how shoppers interact at retail, what drives shopping missions – both planned and unplanned trips, why they make choices within a category, why they select one retailer over the other and so on. They should undertake the type of qualitative research that gets beyond the consciously rationalized explanations and discovers the more subconscious emotional triggers and then calibrate those findings into their strategies. Insights are not meant to inform – insights are meant to inspire. Not only do insights help solve problems but they also help us differentiate ourselves from our competitors.
Q6. Why do you think manufacturers and retailers should collaborate in order to develop a better perspective about their customers?
The ultimate objective of both parties is to develop a shopping program that maximizes their return on investment (ROI) as a group. The basic difference between the two is that manufacturers focus on their brands while retailers focus on the category. Manufacturers should always bring category solutions to their retailers, never brand solutions.
The key to success lies in understanding the retailer’s category objectives and strategies. For example, Tesco has a baby club and if you are a manufacturer in the baby category you not only want to know that Tesco has a baby club but you want to know why. There were a segment of moms with babies who already shopped at Tesco but would not buy their baby products there. Research revealed that they did not trust Tesco for baby products as much as they did for other products. These moms preferred to take their baby business to Boots, the leading retailer of healthcare products, despite it often charging up to 20 percent more. Knowing this would help you build a much stronger sales story because you have insight into why Tesco started this program. Again, even in this example, it’s about the ‘why.’
To learn more about Chris Brace, visit www.shopperagency.com. For more information on shopper planning, brand management, traditional advertising, and promotions join the Shopper Intelligence Group on LinkedIn. Visit the interviews section on FRESH for more retail insights and thoughts straight from the experts.